The largest deposit, state by state
| State | Contract price | Deposit limit |
|---|---|---|
| NSW | $5,000 or more | 10% |
| NSW | Under $5,000 | No specific limit, but terms should be fair and reasonable |
| Victoria | Under $20,000 | 10% |
| Victoria | $20,000 or more | 5% |
| Queensland | $3,300 or less | 20% |
| Queensland | $3,301 to $19,999 | 10% |
| Queensland | $20,000 or more (Level 2) | 5% |
| South Australia | $20,000 or more | Should be no more than 5% |
Queensland allows one exception: a deposit of up to 20% where substantial customised building work or prefabrication is done away from the site and makes up more than 50% of the total contract price. The QBCC’s examples include made-to-measure kitchen modules, windows, sheds, pergolas and cladding.
In NSW, where the job needs home building compensation cover, the contractor cannot lawfully ask for any deposit until that cover is in place and you have the certificate. Notice 02 covers the certificate.
Victoria passed new building contract laws in September 2025 that take effect by 1 December 2026 and may change Victoria’s deposit limits. Until then, Consumer Affairs Victoria says the current laws remain the same. Check Consumer Affairs Victoria before you sign.
Take a contract price of $300,000, chosen only to make the arithmetic easy. The largest deposit each cap allows works out as:
- NSW, at 10%
- $30,000
- Victoria, at 5%
- $15,000
- Queensland, at 5%
- $15,000
Leaving aside Queensland’s off-site exception above, a request for more than that would be over the cap in that state.
If you are asked for more than the cap
Queensland
The QBCC suggests raising it with the contractor first. If they keep asking, you do not have to pay the extra, and the request may be a warning sign. If you do pay more than the lawful deposit, you cannot recover the excess in a home warranty claim for a refund of your deposit.
Victoria
Consumer Affairs Victoria lists what can go wrong: the contractor may take the money and not finish, which can mean a long and costly legal dispute; the builder may not finish on time or fix faults; and the insurer or the BPC may not cover advance payments.
Paying as the work goes up
After the deposit come progress payments. Each state frames the rule differently, but all three tie payment to work done.
NSW
Every contract over $20,000 must have a progress payment schedule. It can use fixed payments after stages of work that are described in clear and plain language, payments as work is done and costs are incurred, supported by invoices or receipts, or a mix of both.
Queensland
For contracts over $3,300, you and the contractor negotiate the number and timing of payments, but every payment must be relative to the work completed. For example, the contractor cannot claim more than 50% of the price, deposit included, until at least 50% of the work on site is done.
Victoria
By law, you pay for completed stages. Consumer Affairs Victoria names four:
- Base: depends on the floor; for a concrete floor, when the floor is complete.
- Frame: the building surveyor has approved the completed frame.
- Lock-up: external cladding and roof covering fixed, flooring laid, and external doors and windows fixed, even if temporary.
- Fixing: all internal cladding, architraves and skirting, the doors and built-in shelves, the baths, basins, troughs and sinks, and the cabinets and cupboards are fitted and fixed in position.
It sets out the usual share of the total price for each stage, and says you must get legal advice if you are considering different payments.
Victoria passed new building contract laws in September 2025 that take effect by 1 December 2026 and may change Victoria’s progress payment stages and limits. Until then, Consumer Affairs Victoria says the current laws remain the same. Check Consumer Affairs Victoria before you sign.
Before you make each payment
Consumer Affairs Victoria suggests making sure, before each progress payment, that the work:
- has been inspected and passed by the building surveyor
- meets what your contract requires
- is finished.
For a large project such as a new home, NSW suggests you may consider a progress inspection by an independent building consultant or architect before each payment, and checking with your lender about any special requirements for progress payments.
The QBCC warns that paying more than the contract says, or paying before the due date, reduces your protection under the Queensland Home Warranty Scheme. Consumer Affairs Victoria makes the same point: work paid for before it is finished may fall outside home warranty insurance.